New research, carried out by United Trust Bank, has revealed that developers are still turning to brokers for help having been turned down for funding by their usual lenders.
The survey found that nearly 9 out of 10 brokers (88%) operating in the development finance sector had been approached by developers in the last 12 months because they had been refused funding from the lender with which they would usually work.
The survey also found that 50% of brokers had their proposals turned down the last time they approached a High Street bank with a development finance deal.
Less than a third of brokers (28%) felt that from their and their clients’ perspectives the High Street banks had increased lending to businesses in 2014 whilst only 40% felt that the High Street banks would increase their lending in 2015.
Noel Meredith, Executive Director of United Trust Bank, said;
“The results of this United Trust Bank survey echo research carried out by the NHBC last year which found that gaining access to suitable funding was a serious concern for smaller developers. 50% of the small builders who took part in the NHBC survey found banks still reluctant to lend to small builders and 39% found that a move to centralised decision making and the loss of a local banking relationship was a serious impediment to business.
“However, all banks are not the same. Whereas many lenders, including the High Street banks, have decided that lending to smaller developers no longer fits their credit criteria, others such as United Trust Bank, have stepped in to fill at least some of the void. United Trust Bank has increased its development finance lending every year, and has provided hundreds of millions of pounds of new project funding over the last few years, with loan sizes ranging from around half a million to over ten million pounds.
“Developers may have found, and indeed still are finding it tough to secure funding for projects from some of the better-known lenders. However, although the credit crunch caused some banks to draw back from development finance, others, like United Trust Bank, have extended their services. As a specialist lender with highly experienced staff we are able to discern which developers have viable projects, and with the help of our broker partners we intend to continue supporting SME developers. Once brokers and their developer clients have experienced our positive approach, the bespoke service, quick decision making and the real customer focus offered by a specialist development finance lender, they return time and time again.”